DMP impact on credit rating.

sjk100

Hi all! I am in the process of starting up a Debt Management Plan through the CCCS after finally facing up to my debts and the need to sort them out. My DMP will probably run for approx 5 years assuming payments are accepted and interest not charged etc.

My biggest concern is the impact that the DMP will have on my credit rating. I am not in a position where I want ANY new credit but further down the line would definitely like to think I will be in a position to take out a mortgage (and stop throwing money/rent into someones elses pocket!!!), does anybody know the impact that my DMP will have upon my chances of getting a mortgage a few years down the line or after my DMP has finished?

Any advice or peoples opinions would be greatly appreciated,
thanks.

immoral_angeluk

A DMP will negatively affect your credit rating. You'll get defaults from your creditors because you've defaulted on your credit agreement but if you are in the position where you need a DMP then credit rating should be the least of your worries.

rustybucket

Defaults (which you will probably get on a DMP) will effect your credit rating, however it will not stop you getting a mortgage.

Kevicho

By the time the DMP finishes most of the defaults will have a year a most to run, so I wouldnt worry too much.

Concentrate on the task at hand

Hobsch

Just on this subject slightly - been discussing DMP with a colleague this morning. They have a credit card and have been making payments on their own DMP. The amount they are repaying is now slightly more than what the minimum payment would have been - obviously no interest being added at the moment.
If they contacted the provider and said they wanted to go back to repaying normally and having the interest charged would this be accepted and would it help improve their rating? Sorry to ask on this thread - they are signing up themselves as we speak.

sjk100

Thanks very much guys.

I am very much focussed on getting myself debt free. Just a concern that the DMP would ruin my chances of ever actually paying into a place of my own instead of somebodies pockets! The DMP kicks off next month and already I feel a big weight has been lifted off my shoulders. I think the next few months may be 'interesting' though with my various creditors dealing with my payment offers!!! Looking at the long term picture and the idea of being debt free a few years down the line makes me feel SOOOO much better than I did 6 months ago!

desperate84

Hi SJK,

I am in the same position as you, but with only 2 creditors

I really want a mortgage and the security of owning my home home..it isn't the least of my worries. I want a future and to get back on track

Will be interested to hear the answers

rayday2

We are currently a year into a DMP and having a remortgage we were told we were classed as "near prime" that means that when our current deal ends in 2 years we can shop on the highstreet for a mortgage that is if we don't do anymore damage to our history.

SO yes there is hope you would definately get a mortgage its more the interest you would have to pay, I would recommend setting up an ISA now so you have a good deposit as that will give you a better interest rate.

There are worse things you can do to your credit history CCJs worsen it, but IVA and Bankrupcy are the two more "damaging" items.

Crown

Just to add to what has already been said you shouldnt have a problem getting a mortgage although it could affect the rate you have to pay. If you do start a DMP and stick with it remember that the defaults should drop off your credit file within 6 years as long as the lender doesnt seek a CCJ against you.

Like Rayday Im just over a year into my DMP and have a remortage going on that should complete tomorrow although I have had to pay nearly 1% extra on high street bank lending because of my credit.

sjk100

Thanks very much guys. Starting my DMP is the best way for me to get out of debt, but as mentioned my only main concern was that I would be effected as a result of it for years and years to come.

Really appreciate your input folks, has made me feel a lot happier with what I am doing.

pinkkat8910

Hi sjk,

I can sympathise with your worries, it was my main concern also when setting up a DMP.

As previously stated, you will get defaults but these clear within 6 years and even with defaults against your record you can get a mortgage but you pay the premium!

Keep us posted with how your DMP goes won't you?

Good Luck!!